EUROPE GAS-European gas prices rise as U.S. -Iran war deadlock continues

Geopolitical tensions and attacks in Middle East drive gas price rise

Rising prices offset by weak European demand due to mild weather and strong renewables

- European gas prices rose on Monday morning as the United States and Iran appeared to be at a deadlock over efforts to end the war and after a nuclear power plant in the United Arab Emirates came under attack.

The benchmark Dutch front-month contract at the TTF hub TFMBMc1 was up 0.733 euro at 50.93 euros per megawatt hour (MWh) or around $17.36/mmBtu, by 0810 GMT, ICE data showed.

The contract briefly touched 52.44 euros/MWh in early trade, its highest level since April 7.

The British June contract NGLNMc1 was up 1.64 pence at 125.30 pence per therm, ICE data showed.

Drone attacks on the UAE and Saudi Arabia and and rhetoric from the United States and Iran raised concerns of an escalation in the conflict.

U.S. President Donald Trump on Friday said he is running out of patience with Iran while Iranian Foreign Minister Abbas Araqchi said Tehran has "no trust" in the U.S.

The Iran conflict has led to the near closure of the Strait of Hormuz through which roughly a fifth of the world's LNG typically passes.

“These comments have further dashed hopes for an agreement to end attacks and seizures of ships in the strait,” analysts at Engie EnergyScan said in a daily research note on Monday.

The geopolitical concerns offset weaker demand for gas across north-west Europe.

“The fundamental picture in north-west Europe is overwhelmingly bearish over the next who weeks with a lot softer demand forecast than was earlier expected due to higher temperatures, as well as strong solar output and a spike in wind speeds tomorrow,” LSEG analyst Yuriy Onyshkiv said in a daily research note.

Local distribution zone demand, which includes home heating, is forecast to decline by 233 gigawatt hours/day to 1,235 GWh/d for the day-ahead, LSEG data showed.

In the European carbon market, the benchmark contract CFI2Zc1 was up 0.25 euro at 75.84 euros a metric ton.